Paratus Energy Services Strengthens Position with New Deal

Paratus Energy Services Enters Receivables Monetization Agreement

Paratus Energy Services Ltd. (Oslo: PLSV), a noted player in the energy sector, has announced a strategic development that promises to bolster its financial standing. Through its subsidiary Fontis Holdings Ltd., Paratus has successfully secured an agreement with a prominent international bank aimed at addressing overdue invoices amounting to approximately $209 million.

Details of the Receivables Payment

The Receivables Payment will see Fontis receiving the funds from its client before the end of the current month. Although the exact fee related to this transaction remains confidential under the terms agreed upon, it is considerably below 10% of the total amount involved. Paratus has taken a thoughtful and calculated approach in pursuing this monetization of receivables.

CEO Insights on the Agreement

Robert Jensen, the CEO of Paratus, articulated the strategic vision behind this move. "As previously stated, we have been actively identifying avenues to optimize our receivables balance," he noted. This particular agreement emerged after extensive discussions with various potential partners, ultimately proving to be a well-timed and valuable opportunity for the Company.

Impact on Financial Health

Following the successful application of the Receivables Payment, Fontis will have a pro forma receivable balance with the customer near $140 million. Moreover, as of the close of the previous year, Paratus Group reported a cash balance of approximately $98 million. This influx from the receivables arrangement is set to significantly enhance the Company's cash position.

Capital Allocation Strategy

Paratus is committed to making disciplined capital allocation decisions. The net proceeds from this notable payment are expected to be utilized in several strategic ways, including supporting operational needs, restructuring capital efficiently, and potentially funding shareholder distributions or repurchasing shares.

Continued Commitment to Shareholders

In reflecting on its dedication to returning value to shareholders, Paratus has consistently recognized the importance of sustainable distributions. Recently, the Company distributed $0.22 per share, complemented by its interim results, underscoring its commitment to maintaining stable returns as dictated by its financial framework.

About Paratus Energy Services

Paratus Energy Services Ltd. operates as an investment holding company, effectively managing a collective of leading companies in the energy services domain. The Paratus Group includes its holdings in Fontis Energy, an offshore drilling venture with a fleet of advanced jack-up rigs, and a significant joint venture interest in Seagems. Notably, Fontis operates within lucrative contracts while Seagems boasts a robust range of multi-purpose pipe-laying vessels, establishing a strong foothold in the energy sector across diverse geographical locations.

Frequently Asked Questions

What is the significance of the new agreement for Paratus Energy Services?

The new agreement allows Paratus to manage overdue receivables more effectively, thus improving financial liquidity and overall cash flow.

How much does the Receivables Payment amount to?

The Receivables Payment totals approximately $209 million.

What does Paratus plan to do with the net proceeds from this agreement?

Net proceeds will be used to support operations, optimize capital structures, and fund shareholder distributions or buybacks.

What steps is Paratus taking to ensure shareholder returns?

Paratus has demonstrated its commitment to shareholders by previously distributing $0.22 per share and maintaining a policy of sustainable returns.

Can we expect Paratus to pursue similar opportunities in the future?

Yes, the company remains open to evaluating additional monetization opportunities that optimize their receivables balance moving forward.

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